Fund managers back $2.2bn Guzman Y Gomez IPO

australian equities IPO Magellan Hyperion Asset Management firetrail

3 June 2024
| By Laura Dew |
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Hyperion Asset Management and Firetrail Investments are among fund managers backing the upcoming $2.2 billion IPO of Mexican chain Guzman Y Gomez (GYG).

The popular Mexican chain has been speculating on an eventual public listing for several years and has now announced it plans to list on 20 June 2024 with a market cap of $2.2 billion.

A fully underwritten initial public offering (IPO) will have 1.1 million shares priced at $22 per share to raise $242.5 million which will be used to support its growth strategy over the coming years.

In a statement, GYG said it believes there is a “significant network opportunity” both in Australia and globally for the company. It expects to open 30 new restaurants in FY25 and increase to 40 per annum within five years. The firm also has an emerging presence in Singapore, Japan and the US.

The listing is underwritten by Barrenjoey Markets and Morgan Stanley Australia as joint lead managers.

“Considerable support” has been given by existing shareholders, including Hyperion Asset Management, Firetrail Investments, Cooper Investors and Aware Super. Institutional shareholders Barrenjoey Private Capital and TDM Growth Partners will retain significant investment post-IPO and are committing to a voluntary escrow through to the release of its FY25 results.

The firm was formerly backed by Magellan but it sold its 11 per cent stake for $140 million in May 2022. At the time, the manager said it would allow Magellan to focus on its core fund management activities. Magellan’s then head of capital and advisory, Craig Wright, also resigned from GYG’s board where he had been a non-executive director.

Hilton Brett, co-chief executive of GYG, said: “GYG has a strong operational and financial track record, with global network sales increasing from $101 million in FY15 to $759 million in FY23, a CAGR of 29 per cent. In addition to our delicious food, that growth has been underpinned by compelling restaurant economics which has allowed us to invest in our restaurant network, our teams and our systems.

“We expect our sales growth to continue through the opening of new restaurants and increasing sales in existing restaurants. We also expect our profitability to improve as we continue to improve our execution in restaurants and we further leverage the benefits of our increasing scale. As a result, we expect pro forma EBITDA to grow from $29.3 million in FY23 to $59.9 million in FY25.”

GYG has 210 stores across four countries including 185 in Australia. Between FY15 and FY23, its global network sales increased from $101 million to $759 million and is expected to reach $1,138 million by FY25, supported by strong comparable sales growth and ongoing network expansion.

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